Computation of Limitation under Section 34(3) starts from disposal of Section 33 Application

FACTS

The Ministry of Shipping, Road Transport and Highways issued a preliminary notification dated 15.12.2009 under Section 3A(1) of the National Highways Act, 1956 for acquisition of land in Bellary District, which included land belonging to Respondent No. 1. By a declaration dated 14.12.2010 under Section 3D(2), the land vested in the Central Government free from all encumbrances. The competent authority determined compensation under Section 3G(1) vide Award dated 05.12.2011.

NHAI invoked arbitration under Section 3G(5) of the 1956 Act. The Deputy Commissioner-cum-Arbitrator, Bellary passed an Award dated 16.02.2013 redetermining market value. The High Court of Karnataka subsequently set aside this Award on 16.03.2019 and remitted the matter for de novo consideration.

Pursuant to remand, the Arbitrator passed a fresh Award on 03.02.2022 granting benefits of Sections 23(1-A), 23(2), 28 and 34 of the Land Acquisition Act, 1894. Thereafter, on 08.03.2022, NHAI filed an application under Section 33(1)(a) of the Arbitration and Conciliation Act, 1996 seeking correction of the Award. On 10.03.2022, Respondent No. 1 also filed an application under Section 33(4) seeking an additional award. Both applications were dismissed by a common order dated 04.07.2022, certified copy of which was received by NHAI on 15.09.2022.

NHAI filed applications under Section 34 of the Act on 29.10.2022 along with applications for condonation of delay. The Principal District and Sessions Judge, Bellary condoned the delay vide order dated 05.08.2023. The Respondent challenged this before the High Court of Karnataka (Dharwad Bench), which by its order dated 22.01.2024 allowed the writ petition and set aside the condonation order, holding that NHAI’s Section 33 application was not maintainable and therefore could not defer the limitation under Section 34(3).

ISSUES

Whether the limitation prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996 commences from the date of the original arbitral award, or from the date on which the application filed under Section 33 of the Act is disposed of by the Arbitral Tribunal, particularly where such Section 33 application is ultimately found to be not maintainable or is dismissed.

ARGUMENTS

On behalf of the Appellant (NHAI):

The Applicant contended that both parties had filed applications under Section 33 and therefore NHAI could not have been expected to file the Section 34 application before disposal of those proceedings. It was urged that the High Court erred in refusing to exclude the time spent in disposal of the Section 33 applications while computing limitation. Reliance was placed on Geojit Financial Services Ltd. v. Sandeep Gurav (2025 INSC 1021) to demonstrate that the issue was no longer res integra.

On behalf of the Respondent (T. Younis):

The Respondent submitted that NHAI’s application under Section 33(1)(a) was, in substance, an attempt to review the Award and not a mere correction of clerical errors. It was argued that only a maintainable application under Section 33 could extend the limitation period. Reliance was placed on State of Arunachal Pradesh v. Damani Construction Co. [(2007) 10 SCC 742], contending that since the application was not maintainable, no exclusion of time could be claimed. It was further argued that the Arbitral Tribunal had become functus officio and the merits could not be reopened under the guise of Section 33.

JUDGEMENT

The Supreme Court allowed the appeal and set aside the High Court’s order dated 22.01.2024.

The Court held as follows:

1. A plain reading of Section 34(3) of the Act makes it evident that where a request under Section 33 has been made, limitation for filing an application under Section 34 shall be reckoned from the date on which such request is disposed of. The provision does not distinguish between applications which are ultimately allowed or dismissed, nor does it stipulate that only a “maintainable” application under Section 33 would defer commencement of limitation.

2. Had the legislature intended to restrict the benefit only to applications which were ultimately allowed or held to be maintainable, it would have expressly so provided. The Court cannot read into the provision a restriction which the legislature has not consciously incorporated.

3. Once proceedings under Section 33 are initiated and entertained by the Arbitral Tribunal, the award remains subject to the tribunal’s limited jurisdiction for correction, interpretation or supplementation. The parties cannot be compelled to institute Section 34 proceedings merely as a matter of abundant caution during the pendency of Section 33 applications.

4. The reliance on State of Arunachal Pradesh v. Damani Construction Co. was held to be misplaced. In that case, no formal application under Section 33 had been filed; the party had merely addressed a letter seeking review. In the present case, formal applications were filed by both parties and were entertained and disposed of by the Tribunal.

5. Compelling parties to simultaneously file Section 34 applications during pendency of Section 33 proceedings would result in multiplicity of proceedings and procedural uncertainty, defeating the scheme and object of the Act.

6. On facts, the certified copy of the order disposing of the Section 33 applications was received on 15.09.2022 and the Section 34 applications were filed on 07.11.2022 — well within the statutory period of three months plus thirty days contemplated under Section 34(3) read with its proviso.

7. As a word of caution, the Court clarified that where applications under Section 33 are found to be sham, frivolous, or mala fide or filed solely for the purpose of defeating limitation, courts would be justified in imposing exemplary and punitive costs.

RATIO DECIDENDI

The limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996 commences from the date of disposal of the application filed under Section 33, irrespective of whether such application is ultimately allowed, dismissed, or found to be not maintainable. The statutory language does not impose any qualification of “maintainability” as a precondition for the deferral of limitation. What matters is that jurisdiction under Section 33 was formally invoked and proceedings were entertained by the Arbitral Tribunal.

AMLEGALS REMARKS

This judgment settles an important procedural question that has practical ramifications for parties involved in arbitration. The ruling provides clarity that the mere filing of a formal application under Section 33, provided it is entertained by the Tribunal, is sufficient to defer the starting point of limitation under Section 34(3), regardless of the ultimate outcome or maintainability of such application.

Practitioners must, however, exercise caution: the Court has drawn a clear distinction between bona fide applications and those that are sham or frivolous, with a warning of exemplary costs in the latter category. The safe course, therefore, remains to ensure that any Section 33 application is filed within the statutory thirty-day window and raises a genuine grievance, howsoever limited in nature.

Case: National Highway Authority of India v. T. Younis & Anr.

Court: Supreme Court of India

Date of Judgement: 02.06.2026

Citation: 2026 INSC 616 (@ SLP (C) No. 7570 of 2024)